Friday’s bond market has opened in negative ground, giving back part of yesterday’s big rally but still leaving enough for an improvement in rates. Stocks are posting losses again with the Dow down 654 points and the Nasdaq down 22 points. The bond market is currently down 9/32 (4.99%), which should leave this morning’s rates approximately .125 - .250 of a discount point lower than Thursday’s early pricing. The actual size of this morning’s change depends on how much of an intraday revision you received late yesterday.

Yesterday’s favorable open in bonds snowballed as the day progressed, leading to significant gains before the end of the day. This was fueled heavily by technology stock concerns that spread throughout the global markets, creating a flight-to-safety move into bonds. As stock selling picks up momentum, especially when there are concerns it may continue in the short-term future, investors move funds away from stocks and into the safety of U.S. bonds. While this created a nice bond rally and noticeable improvement in mortgage rates yesterday, it is important to remember that those gains can quickly be reversed if the underlying concern in stocks goes away. In other words, enjoy the lower mortgage pricing today, but proceed cautiously if floating an interest rate and looking to close soon. It may be a good opportunity to lock-in a lower rate at this time because generally unfavorable bond conditions such as higher oil prices and inflation are still very much active at this time and may come back into the forefront soon.

This morning’s sole relevant economic release was October’s revised Index of Consumer Sentiment at 10:00 AM ET. The University of Michigan announced this month’s revised reading stands at 48.0. This was a minor downward revision from this month’s 48.1 preliminary reading two weeks ago. A larger decline would have been good news for bonds and mortgage rates because waning consumer confidence usually translates into softer spending that makes up such a large portion of the U.S. economy. The lack of a noticeable change has made the report a non-factor for this morning’s mortgage pricing.

Next week has a full schedule of relevant economic reports and other events that may influence mortgage rates. The data includes the first Gross Domestic Product (GDP) reading of the 3rd quarter and the Fed’s preferred inflation indexes. There are also a couple of shorter-term Treasury auctions set that have the potential to alter trading during afternoon hours. However, the spotlight will be on the Fed’s second to last FOMC meeting of the year that adjourns Wednesday afternoon and has a small chance of yielding another bump to key short-term interest rates. The week starts light with nothing of importance scheduled for Monday, leaving weekend headlines to be the likely cause of a move in rates that day. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.